Early Look

Tuesday, August 31, 2021

Futures	Up/Down	%	Last
Dow	37.00	0.10%	35,389
S&P 500	2.25	0.06%	4,527
Nasdaq	-0.50	0.00%	15,597

 

 

U.S. equity futures are again extending gains as the backdrop remains the same, with softer bond yields boosting tech stocks after last night’s record high close, and as investors continue to bet on the prospect of central bank stimulus lasting over the final months of the year. The S&P 500 and the Nasdaq Composite added to their record-setting pace of gains on Monday, driven by a rally in information technology stocks, but the Dow Jones Industrial Average lagged behind its equity benchmark peers. The S&P 500 closed up 0.4% at around 4,529, establishing an intraday record high at 4,537.36, while the Nasdaq Composite Index ended 0.9% higher at roughly 15,266, following its own intraday record on Monday at 15,288.08. Growth stocks have led the market Friday and today, after Federal Reserve Chairman Jerome Powell recently stressed that the central bank should not overreact to a recent jump in inflation. While the central bank is expected to begin reducing its bond purchases later this year, Fed officials have emphasized that the timing of such a move won’t impact any later decision to raise interest rates from near zero. China’s post-COVID recovery appears to have stalled in August, with an official economic activity reading coming in barely above the 50-point mark that separates growth from contraction. Still overseas markets moved higher. In Asian markets, The Nikkei Index jumped 300 points to 28,8089, the Shanghai Index rose 15 points to 3,543 and the Hang Seng Index climbs 339 points (1.33%) to 25,878. In Europe, the German DAX is higher by about 30 points to 15,915, while the FTSE 100 is down about 30-points to 7,120. In stock news, shares of Zoom Video (ZM), the face of the pandemic stay at home trade tumbled overnight on disappointing earnings results.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 19.42 points, or 0.43%, to 4,528.79

·     The Dow Jones Industrial Average fell -55.96 points, or 0.16%, to 35,399.84

·     The Nasdaq Composite surged 136.39 points, or 0.90%, to 15,265.89

·     The Russell 2000 Index declined -11.16 points, or 0.49% to 2,265.99

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:00 AM ET         CaseShiller 20 City Index for June…est. 1.8%

·     9:00 AM ET         Monthly Home Price Index MoM for June

·     9:45 AM ET         Chicago PMI for Aug…est. 68.0

·     10:00 AM ET      Consumer Confidence for Aug…est. 124.0

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: CHS, DBI, DXLG

·     Earnings After the Close: AMBA, AMWD, CAL, CRWD, PVH, PYCR

 

Other Key Events:

·     Jefferies Semiconductor, IT Hardware & Comm Infrastructure Summit 2021 (virtual), 8/31-9/1

·     Citigroup Asia Tech, Media & telecom Virtual Conference, 8/27-8/31

·     Piper Sandler 2021 Texas Bank Forum (virtual), 8/30-9/1

·     Piper Houston E&P Bus Tour, 8/30-8/31

·     China Caixin Manufacturing PMI for Aug

 

 

Macro	Up/Down	Last
Nymex	-0.59	68.62
Brent	-0.45	72.96
Gold	6.50	1,816.85
EUR/USD	0.0034	1.1831
JPY/USD	-0.03	109.89
10-Year Note	+0.003	1.287%

 

 

World News

·     Chinese Manufacturing PMI Aug 50.1 vs. expected 50.2 and previous 50.4; the Non-Manufacturing PMI Aug 47.5 below expected 52.0 and prior reading of 53.3; the Composite PMI Aug 48.9 below previous 52.4

·     U.S. completes withdrawal of forces from Afghanistan after 20-year war; U.S. ends its military presence in Afghanistan on Tuesday with the final flight out of Kabul – Reuters

·     Japan Aug consumer Conference lower: 36.7 vs 37.5 previous; Japan July Housing Starts beat at 9.9% y/y vs 4.8% consensus; Japan July Unemployment Rate lower: 2.8% vs 2.9% consensus

·     German Aug Unemployment Change lower: -53k vs -40k consensus; and German Aug Unemployment Rate lower: 5.5% vs 5.6% consensus

 

Sector News Breakdown

Consumer

·     American Woodmark (AMWD) Q1 adj EPS $0.70 vs. est. $1.48; Q1 revs $442.6M vs. est. $461.79M; said while delivering sales growth across all channels our adjusted EBITDA margins of 7.3% were below expectations

·     Bed Bath & Beyond Inc. (BBBY) announced that Cindy Davis has stepped down from her positions as Executive Vice President, Chief Brand Officer, and President of Decorist effective August 30, 2021. The Company also announced the appointment of Rafeh Masood, Executive Vice President and Chief Digital Officer, as Chief Digital Officer & interim Chief Brand Officer, to lead the combined brand, marketing and digital teams effective immediately.

·     Performance Food Group (PFGC) is moving into the S&P MidCap 400 following its planned acquisition of Core-Mark Holding Co. (CORE) while taking CORE’s place in the SmallCap 600 is TreeHouse Foods (THS), which is being displaced in the Midcap 400 by PFGC

 

Energy, Industrials and Materials

·     Nordson (NDSN) 3Q EPS $2.42 vs est. $2.08 on revs $647Mm vs est. $604.3Mm; guides FY revs +11-12% from 8%-10% and vs est. +10.3%, sees FY EPS $4.75-7.95 vs est. $7.58

·     ReneSola (SOL) Q2 adj EPS $0.11 vs. est. $0.05; Q2 revs $18.5M vs. est. $20.75M; sees Q3 revenue $19M-$21M vs. est. $26.93M; sees FY21 revenue $90M-$100M vs. est. $97.49M

·     Saudi Aramco may reduce the official selling price of its flagship Arab Light crude by 58c/bbl from its previous month for October sales to Asia – Bloomberg

 

Financials

·     StoneCo (STNE) 2Q qtrly payment volume +58.6%, revs -8.1%, SMB net adds 188K; suspending Fy take rate and adjusted net margin views

·     Tradeweb Markets (TW) announced it has appointed Sara Furber as its Chief Financial Officer, effective September 7, 2021. She succeeds Robert Warshaw, who will leave the company following a period of transition

 

Healthcare

·     Inspire Medical Systems, Inc. (INSP) said that a Centers for Medicare and Medicaid Services (CMS) panel has unanimously approved a recommendation to increase the previously proposed reimbursement for Inspire procedure performed in Ambulatory Surgical Centers (ASCs) as indicated on the CMS website as posted today.

·     Ligand (LGND) headed to the SmallCap 600 to replace Cincinnati Bell (CBB), which is to be acquired by Macquarie Infrastructure and Real Assets

·     Galapagos (GLPG) announced the planned retirement of CEO Onno van de Stolpe

·     Sonnet (SONN) announces successful completion of the discovery phase for its next preclinical pipeline candidate (SON-1410)

 

Technology, Media & Telecom

·     Zoom Video (ZM) 2Q adj EPS $1.36 vs est. $1.16 on revs $1.022B vs est. $991Mm; guides 3Q total revs $1.015-1.02B vs est. $1.013B, sees 3Q adj EPS $1.07-1.08 vs est. $1.09; guides FY revs $4.005-4.015B vs est. $4.007B, sees FY adj EPS $4.75-4.79 vs est. $4.67; 2Q number of customers contributing more than $100,000 in TTM rev up 131% YoY; 2Q GAAP Operating Margin of 28.8% and Non-GAAP Operating Margin of 41.6%

·     Yandex (YNDX) said it would buy Uber’s (UBER) stakes in their joint foodtech, delivery and self-driving businesses, and increase its stake in a mobility-focused joint venture as part of a $1 billion deal; YNDX added that it had received a call option to purchase Uber’s remaining stake in mobility businesses for up to $2 billion.

·     Google (GOOGL) will invest $1.2 billion by 2030 to expand its cloud computing infrastructure in Germany and to increase the use of renewable energy.

·     Apple (AAPL) and Google (GOOGL) must allow developers to use other payment systems, new Korean law declares; South Korea will require the companies to allow competing payment systems, threatening their 30% cut of most in-app digital sales – WSJ https://on.wsj.com/3yx4Qc8

·     Digital Turbine (APPS) is moving into the MidCap 400, to replace Ligand Pharmaceuticals (LGND)